Broadcom chief executive Hock Tan on Monday last week offered US$70 a share in cash and stock for Qualcomm, seeking to build a powerhouse that leads the market for wireless chips in devices such as Apple Inc’s iPhones.

Even before Qualcomm’s response, Tan and his advisers were preparing to wage a proxy battle in which they would appeal directly to Qualcomm investors.

Tan said he is pleased with the reaction he has already received from Qualcomm shareholders and customers regarding his proposal and would prefer to keep the negotiations friendly.

“We have received positive feedback from key customers about this combination,” he said in a statement following Qualcomm’s rejection. “We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction.”

The combined business would instantly become the default provider of a set of components needed to build each of the more than 1 billion smartphones sold every year.

The deal would dwarf Dell Inc’s US$67 billion acquisition of EMC in 2015 — then the biggest in the technology industry.

“Qualcomm shareholders are likely to hold out for more, but we believe something in the US$80-ish range is likely enough to bring most of them around,” Sanford C. Bernstein analyst Stacy Rasgon wrote in a note published at the weekend.

Broadcom is unlikely to walk away given that there is significant headroom to find a deal acceptable to Qualcomm shareholders, he added.

Tan, who has built Broadcom through a series of transactions that have helped reshape the US$300 billion semiconductor industry, has previously been able to pull off deals with friendly approaches.

Acquiring Qualcomm is further complicated by his target’s own push to close a more than US$40 billion purchase of NXP Semiconductors NV. That purchase is being held up by regulatory approval.

Tan said his offer for Qualcomm stands with or without Qualcomm’s acquisition of NXP.

For now, Qualcomm’s board is sticking with its management team, led by chief executive Steve Mollenkopf.

“After a comprehensive review, conducted in consultation with our financial and legal advisers, the board has concluded that Broadcom’s proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty,” Qualcomm presiding director Tom Horton said in the statement. “We are highly confident that the strategy Steve and his team are executing on provides far superior value to Qualcomm shareholders than the proposed offer.”